case 1:15-cv-03562-px document 103-2 filed 11/19/18 page 1 ... · 2. i submit this declaration in...
TRANSCRIPT
- 1 - 010568-11 1080089 V2
UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND
BALTIMORE DIVISION
)
KIRAN KUMAR NALLAGONDA, ) Case No.: 1:15-cv-03562-PX
) Plaintiff, )
) Date: February 5, 2019
vs. ) Time: 10:00 a.m.
) Dept.: Suite 400
OSIRIS THERAPEUTICS, INC., et. al. ) Judge: Hon. Paula Xinis
)
Defendants. )
___________________________________ ) Complaint filed November 23, 2015
DECLARATION OF REED R. KATHREIN IN SUPPORT OF LEAD PLAINTIFF’S
MOTION FOR AN AWARD OF ATTORNEYS’ FEES, REIMBURSEMENT OF
EXPENSES, AND AN INCENTIVE AWARD FOR LEAD PLAINTIFF
I, Reed Kathrein, hereby declare as follows:
1. I am over 18 years of age and am competent to testify to the matters and facts
hereinafter set forth. I am an attorney duly licensed to practice before all courts of the States of
California, Illinois and Florida, and am admitted pro hac vice to practice in this Court. I am a
partner with the law firm of Hagens Berman Sobol Shapiro LLP (“Hagens Berman”), counsel for
Lead Plaintiff, Dr. Raffy Mirzayan, and the Court-appointed Lead Counsel for the Class in the
above-captioned action (the “Litigation”), together with Liaison Counsel Hirschler Fleischer,
P.C. (“Hirschler Fleischer”) (“Class Counsel”).
2. I submit this Declaration in support of Lead Plaintiff’s Memorandum of Law in
Support of Lead Plaintiff’s Motion for an Award of Attorneys’ Fees, Reimbursement of
Expenses, and an Incentive Award for Lead Plaintiff, arising out of the Settlement Agreement
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 1 of 17
- 2 - 010568-11 1080089 V2
the Court preliminarily approved in September 2018. As discussed below, Plaintiff’s
recoverable costs or expenses total $21,631.91 including the costs incurred by Hirschler
Fleischer as set forth in the Declaration of Wayne Travell. Lead Plaintiff seeks attorneys’ fees of
25% percent of the Settlement Fund. Lead Plaintiff submits lodestar totaling over
$1,020,829.00. Thus, the requested attorneys’ fee award of $4,625,000.00 represents a 4.53
multiplier to lodestar. I discuss the specifics of our lodestar in further detail below.
I. EXPERIENCE AND QUALIFICATIONS OF HAGENS BERMAN ATTORNEYS
3. Hagens Berman is one of the most well respected class action litigation firms in
the country and has litigated some of the largest class actions in history. Hagens Berman has
over 85 lawyers, with offices in New York, Seattle, Washington D.C., Boston, Boston, Newton
Centre, Chicago, Berkeley, Los Angeles, San Diego and Phoenix. Since its founding in 1993,
the firm has been recognized in courts throughout the United States for its ability and experience
in handling major class litigation efficiently and obtaining outstanding results for its clients.
4. Hagens Berman is a leader in class-action litigation. (see
http://www.hbsslaw.com/.) The firm has achieved extraordinary results for millions of
consumers, investors, employees, inventors, and whistleblowers. We have extensive experience
in successfully prosecuting class actions throughout the United States. The firm has represented
millions of plaintiffs in large-scale, nationwide cases involving, inter alia, product liability,
consumer protection and fraud, tort, antitrust, and securities and investment fraud, and has
recovered billions for the classes it represented. Some of these groundbreaking recoveries
include:
a. Visa-MasterCard Antitrust Litigation, Case No. CV-96-5238 (E.D.N.Y.) –
Hagens Berman was co-lead counsel in this suit that challenged the charges
imposed in connection with debit cards. The result was the largest antitrust
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 2 of 17
- 3 - 010568-11 1080089 V2
settlement in history – a $3.05 billion cash settlement and injunctive relief
valued at over $20 billion.
b. In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Practices, &
Prods. Liab. Litig., 8:10ML2151 JVS (C.D. Cal.) – As co-lead counsel, we
alleged a defect causing dozens of models spanning an eight year period to
undergo sudden, unintended acceleration. The Firm’s efforts resulted in a
$1.6 billion settlement that included $500 million in cash payments to class
members; installation of a safety-enhancing brake override system on millions
of vehicles; and a substantial extended warranty for millions of consumers.
To our knowledge, this was the largest automobile class settlement in U.S.
history.
c. In re Elec. Books Antitrust Litig., 11-md-2293 DLC (S.D.N.Y.) – Hagens
Berman pioneered this litigation as lead counsel against Apple and the largest
e-book publishers. We partnered with the U.S. Department of Justice and 33
state attorneys general, representing purchasers of e-books in 19 states and
four U.S. territories. Consumers will receive $560 million in benefits on
single damages of $270 million.
d. Average Wholesale Price Drug Litigation – Hagens Berman was co-lead
counsel to several certified classes in litigation against the nation’s largest
pharmaceutical companies. The suits allege that defendants artificially
inflated the Average Wholesale Price used as a benchmark for almost all
prescription drug sales in the United States. Hagens Berman was lead trial
counsel in a consolidated trial resulting in verdicts against AstraZeneca and
BMS, and class settlements approximating $338 million were approved in
favor of consumers and health plans. Hagens Berman was also special
counsel to the states of Arizona, Montana, and Nevada in their AWP suits,
which have settled on terms favorable to the states.
e. McKesson and First DataBank Drug Litigation – Hagens Berman was lead
counsel in this RICO case alleging that McKesson and First DataBank
fraudulently inflated the prices of more than 400 prescription drugs by
manipulating drug-pricing benchmarks. The class action against McKesson
settled for $350 million on the eve of trial. The First DataBank settlement
resulted in a four percent rollback on the prices of 95% of the nation’s retail
branded drugs – a net impact of potentially billions of dollars. Building on the
recovery against McKesson, Hagens Berman represents six states (Oregon,
Virginia, Utah, Montana, Mississippi, and Connecticut), the City and County
of San Francisco, and other local government agencies in their efforts to
recoup the damages caused to their health plans by McKesson’s scheme.
The county public-payor case (a class of counties) settled for $82 million, and
the City and County of San Francisco settled its claims for $12.5 million.
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 3 of 17
- 4 - 010568-11 1080089 V2
f. Schwab: YieldPlus Funds – Hagens Berman filed the first class action against
Charles Schwab Corporation, alleging that Schwab deceived investors about
the underlying risk in its YieldPlus Funds Investor Shares and YieldPlus
Funds Select Shares. On July 3, 2008, the Honorable William H. Alsup of the
Northern District of California appointed five members of the YieldPlus
Investor Group to the position of lead plaintiff and instructed them to
interview and choose lead counsel. On August 14, 2008, they submitted their
decision to the court to retain Hagens Berman, and on August 18, 2008, the
Court approved that decision. On April 19, 2011, Judge Alsup gave final
approval to the $235 million settlement.
g. Enron ERISA Litigation – Hagens Berman was co-lead counsel in this
litigation and recovered over $220 million in settlements for the benefit of
former Enron employees. This is the largest ERISA settlement in history.
h. DRAM Manufacturers – Hagens Berman filed a class-action suit against the
leading DRAM (Dynamic Random Access Memory) manufacturers, claiming
the companies secretly agreed to reduce the supply of DRAM in order to
artificially raise prices. DRAM is a necessary component in a wide variety of
electronics, such as personal computers, cellular telephones, and digital
cameras because it allows for the storage and retrieval of electronic data.
Plaintiffs included equipment manufacturers, franchise distributors, smaller-
volume customers, and consumers who purchased DRAM from any of the
named defendants. The case settled for $300 million.
i. Volkswagen “Clean Diesel” MDL (N.D. Cal.) – As lead counsel for the
Volkswagen Franchise Dealers, we received final approval of a settlement of
$1.2 billion, representing a result of nearly full damages for the class.
Mr. Berman also serves on the Plaintiffs’ Steering Committee and played a
role in obtaining a settlement of $14.7 billion on behalf of consumers that
included injunctive relief in the form of an optional buyback of the affected
vehicles.
j. In re Stericycle, Inc. Steri-Safe Contract MDL (N.D. Ill.) – As lead counsel in
this contract-based case involving pricing for medical-waste services, we and
our clients recovered $295 million for the class after intensive discovery,
litigation, and economic modeling. The late Judge Milton Shadur, a true lion
of the bench, deeply honored Hagens Berman by observing: “[I]t must be said
that the track record of Hagens Berman and its lead partner Steve Berman is . .
. impressive, having racked up such accomplishments as a $1.6 billion
settlement in the Toyota Unintended Acceleration Litigation and a substantial
number of really outstanding big-ticket results.” In re Stericycle, Inc., 2013
WL 5609328, at *2 (N.D. Ill. Oct. 11, 2013).
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 4 of 17
- 5 - 010568-11 1080089 V2
5. The Hagens Berman attorneys primarily responsible for this case were Reed
Kathrein, former partner Peter Borkon, Karl P. Barth, Danielle Smith, Robert A. Jigarjian and
Christopher A. O’Hara. Details regarding the other attorneys at Hagens Berman who assisted in
litigating this case can be found in the firm resume of Hagens Berman, previously submitted as
Exhibit D to Peter Borkon’s Declaration In Support of Unopposed Motion for Preliminary
Approval (ECF No. 94-10).
6. Reed Kathrein opened the Firm’s Berkeley office and has been integral to the
securities litigation practice at Hagens Berman since joining the Firm in 2007. Mr. Kathrein has
prosecuted over 130 securities class actions since 1988. His recent notable securities cases
include Hagens Berman’s Madoff-related litigation, In re JP Morgan Securities Litigation ($218
million settlement), In re Tremont Securities Law, State Law and Insurance Litigation ($100
million partial settlement and over $1 billion recovery from the bankruptcy trustee), In re
Reserve YieldPlus Fund Securities Litigation, and the In re Charles Schwab Corp. Securities
Litigation ($235 million settlement). Mr. Kathrein is a member of the Council of Institutional
Investors (CII), the National Association of Public Pension Attorneys (NAPPA), the National
Conference on Public Employee Retirement Systems (NCPERS), the National Council on
Teacher Retirement (NCTR), and the State Association of County Retirement Systems
(SACRS). Mr. Kathrein performed much of the work on the case, worked with the damage
expert, directed the mediation strategy, and guided and provided direction to Mr. Borkon, Mr.
Barth, Mr. Jigarjian, Ms. Smith and Mr. O’Hara.
7. Peter Borkon is a former partner at Hagens Berman’s Berkeley office, where his
practice was focused on complex civil litigation, particularly securities class actions and
shareholder derivative suits. Mr. Borkon has practiced law for 22 years and in the field for 17
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 5 of 17
- 6 - 010568-11 1080089 V2
years, and joined Hagens Berman in 2007. His recent cases include: In re JP Morgan Securities
Litigation; In re China MediaExpress Securities Litigation; Lawrence v. Bank of America; In re
Northwest Biotherapeutics Securities Litigation; In re BigBand Networks Securities Litigation;
In re Charles Schwab Corp. Securities Litigation; and In re Reserve YieldPlus Fund Securities
Litigation. While at Hagens Berman, Mr. Borkon regularly spoke on the topics of fiduciary
responsibility, ethics, and developments in securities law at various educational conferences.
Mr. Borkon worked on the Osiris case from its inception and was responsible for directing and
performing much of the work on the case with Mr. Kathrein.
8. Karl P. Barth is an attorney Of‐Counsel in the Seattle office of Hagens Berman.
Mr. Barth’s unique qualifications include that he is a licensed Certified Public Accountant and a
Certified Fraud Examiner. Investor protection has been the focus of Mr. Barth’s entire twenty‐
year career. He has been with the Firm for fifteen years, from 1994‐2004, and again since 2010.
Mr. Barth has performed the preliminary investigation and drafted the initial complaint in
numerous high‐profile securities fraud cases that have won large recoveries for his clients against
companies such as Boeing, Einstein/Noah Bagel Corp., Identix, Midcom Communications,
Midisoft, Oppenheimer Delta Partners, Pepsi Puerto Rico Bottling Co., PriceCostco, Templeton
Vietnam Opportunities Fund, and Wall Data. His cases typically assert claims against the
officers and directors of the corporate defendant, its outside auditors, and other responsible
parties, and involve sophisticated financial and accounting issues. Mr. Barth has worked on the
legal, financial, and accounting aspects of numerous cases and is well versed in Generally
Accepted Accounting Principles (GAAP) and SEC regulations. Mr. Barth offered his expertise
and experience as a member of Hagens Berman’s Osiris team.
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 6 of 17
- 7 - 010568-11 1080089 V2
9. Danielle Smith is an associate at Hagens Berman’s Berkeley office. Ms. Smith’s
practice focuses primarily on multi‐state and nationwide class actions and complex commercial
litigation encompassing investor and securities issues. In particular, Ms. Smith’s work has
focused on securities class action cases, including the BlackRock iShares ETF August 24, 2015
Flash Crash Litigation and Colman et al. v. Theranos, Inc., et al., Case Number: 5:16‐cv‐06822,
a case alleging securities fraud, unfair competition, and negligent misrepresentation in violation
of the California Corporations Code, Business and Professions Code, and Civil Code. Prior to
joining Hagens Berman, Ms. Smith worked as an associate in a law firm representing public
entities, including school districts, cities, and other municipal entities. She is admitted to
practice law in the state of California. Ms. Smith assisted in working on the Osiris case with Mr.
Kathrein’s and Mr. Borkon’s guidance and direction.
10. Robert A. Jigarjian was admitted to The State Bar of California in June 1994.
He is admitted to practice before all California State and District Courts and before the Second
and Ninth Circuit Courts of Appeals. Mr. Jigarjian earned an A.B. degree from Hamilton
College, an M.B.A. from Tulane University, and a J.D. from Golden Gate University. Before
attending law school, Mr. Jigarjian worked as an institutional equity sales trader for Keefe,
Bruyette and Woods. During law school, Mr. Jigarjian interned with the S.E.C. and worked for
two prominent securities class action firms. During his 24-year legal career, Mr. Jigarjian has
primarily focused on representing plaintiffs in securities class actions, shareholder derivative
litigation, and bankruptcy estate trustee litigation. Matters on which he has worked and helped
obtain recoveries include In re Equitec Rollup Litigation (N.D. Cal.), In re Prison Realty
Securities Litigation (M.D. Tenn.), In re Digex, Inc. Shareholders Litigation (Del. Ch.), Isco v.
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 7 of 17
- 8 - 010568-11 1080089 V2
Kraemer (Super. Ct., Maricopa Co., Ariz.), Saito v. McCall (Del. Ch.), In re Salomon Analyst
Litigation (S.D.N.Y.), and Hermerding v. Tripathi, et al. (Bankr. N.D. Cal.).
11. Christopher O’Hara is a Partner at Hagens Berman whose practice focuses on
antitrust, consumer, tax and securities class actions. He served as an active member of firm’s
Microsoft defense team negotiating claims administration policy and processing rules in twenty
consumer and antitrust class-action state settlements around the country and he currently
continues to play a key role in working with claims administrators on class settlements and class
notice programs. Mr. O’Hara also played a leading role for the firm on the $235 million
settlement of In re Charles Schwab Securities Litigation and the $1.6 billion settlement of In re
Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices and Products Liability
Litigation. Mr. O’Hara played a leading role in the firm’s successful defense of the state of
Arizona against claims brought by several Arizona counties in the aftermath of the state’s
tobacco litigation, including the depositions of more than a dozen of Big Tobacco’s expert
witnesses, research scientists and marketing executives. Mr. O’Hara continues to use his
expertise and experience as a member of Hagens Berman’s Osiris team throughout the claims
administration process.
II. OVERVIEW OF CLASS COUNSEL’S ACTIVITIES
12. The prosecution of this case required an extensive effort by Class Counsel.
The settlement is the culmination of three years of investigation, hard fought litigation, and
vigorous and protracted arm’s-length settlement negotiations, and extensive work with damage
experts. During this time, Class Counsel marshaled firm resources and committed substantial
amounts of time and expenses in the prosecution of this Litigation. Class Counsel, among other
things, have (i) thoroughly reviewed and analyzed all publicly available information regarding
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 8 of 17
- 9 - 010568-11 1080089 V2
Osiris, the Individual Defendants, and the claims asserted; (ii) drafted and filed a Motion to
Appoint Lead Plaintiff and Approve His Selection of Lead and Liaison Counsel, and opposed
competing motions; (iii) thoroughly investigated and analyzed class-wide damages, including the
retention and comprehensive collaboration with an experienced economic expert; (iv) assessed
the risks of prevailing on Lead Plaintiff’s claims at trial; (v) prepared an extensive mediation
statement; (vi) engaged in protracted and vigorous settlement negotiations, spanning a five-
month period, including one formal mediation presided over by an experienced mediator, as well
as continued their arm’s-length negotiations, and multiple follow-up conferences; (vii)
investigated, researched, drafted and filed an Amended Complaint and (viii) review confidential
documents supplied by Defendants.
13. My firm’s compensation for the services rendered on behalf of the Class is wholly
contingent, and at the inception of the litigation the firm was completely at risk that it would not
receive any compensation for prosecuting these claims against the defendants.
A. Pre-Filing Investigation and Lead Plaintiff Proceedings
14. On November 23, 2015, the action entitled Nallagonda v. Osiris Therapeutics,
Inc. et al., Case No. 1:15-cv-03562-PX, was filed in the United States District Court for the
District of Maryland, Baltimore Division. The action alleged violations of the federal securities
laws and sought remedy under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
(the “Exchange Act”) and Rule 10b-5 promulgated thereunder. Named as defendants were
Osiris, Lode Debrabandere, Gregory I. Law and Philip R. Jacoby, Jr. Motions asking the Court
to appoint Lead Plaintiff and to approve Lead Plaintiff’s selection of lead counsel were filed on
January 22, 2016, and a hearing on those motions was held on March 21, 2016 before the
Honorable J. Frederick Motz. The Court entered an order granting investor Raffy Mirzayan’s
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 9 of 17
- 10 - 010568-11 1080089 V2
motion and denying the competing motion. Accordingly, on March 21, 2016, Raffy Mirzayan
was appointed as the Lead Plaintiff and the Court approved Lead Plaintiff’s selection of Hagens
Berman as Lead Counsel and Hirschler Fleischer as Liaison Counsel.
15. Class Counsel conducted an extensive investigation prior to filing the Amended
Complaint on April 6, 2018. Rather than file an amended complaint immediately, prior to
anticipated restatements, Lead Plaintiff sought permission by the Court to hold off as more
information was coming in from the Company, and to save cost to the Company and preserve
potential sources of recovery such as the insurance policy. This investigation included a
thorough and detailed review of Osiris’s public filings before, during and after the Class Period
(including SEC filings, publicly available annual reports, press releases, news articles, and other
media reports), review of interim financial reporting produced confidentially as part of the
mediation process, research into the opinions of analysts that followed the stock and ratings
agencies, and the retention of a consulting economist. The investigation also included review
and analysis of pleading filed by the Securities Exchange Commission and the U.S. Attorney for
the Southern District of New York (both in 2017). Class Counsel also had the restatements
analyzed by its forensic accountant and fraud investigator.
B. Mediation and Settlement
16. On December 19, 2017, I participated in a full-day mediation with Jed Melnick
(“Mr. Melnick”) of J.A.M.S. in New York, New York, along with my former partner Peter
Borkon. The parties were nowhere near resolution at the end of that daylong mediation.
The parties disagreed on damage analysis and sources of recovery. To further the mediation’s
progress, Osiris shared confidential interim financial results, and the parties exchanged damage
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 10 of 17
- 11 - 010568-11 1080089 V2
analysis. Mr. Melnick continued to mediate between the parties, speaking to both sides on
numerous occasions over the coming months.
17. Following the initial mediation session, Mr. Melnick continued further
discussions with each side for a number of months. These discussions narrowed the differences
between the parties, but still did not result in a settlement agreement. The parties continued to
exchange information concerning damage analysis and resolve their differences. Class Counsel
continued to meet with their damage expert to address Defendants points.
18. Counsel for the parties continued their negotiations and, after several additional
efforts, ultimately came to a memorandum of understanding in March 2018. Pursuant to the
terms of that memorandum of understanding, Class Counsel spent time negotiating and
documenting the settlement agreement, drafting a motion for preliminary approval and sought
permission to file that documentation with the Court.
19. This Settlement provides between 36% and 86% recovery of estimated maximum
damages to the Class, which consists of Osiris investors who purchased Osiris common stock
within the Class Period. This is an uncommonly large settlement in the securities fraud class
action field. According to Cornerstone Research, the median settlement in 5.2% in 2017.
See Cornerstone Research, Securities Class Action Settlements: 2017 Review and Analysis,
http://securities.stanford.edu/research-reports/1996-2017/Settlements-Through-12-2017-
Review.pdf at page 8.
20. This substantial recovery reduced the need to continue litigating the case and
engage in formal discovery beyond the extensive informal discovery already undertaken.
Instead, the Class will receive immediate and substantial compensation for the claims. In other
words, the size of the settlement, in combination with risks of continuing to litigate reduces the
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 11 of 17
- 12 - 010568-11 1080089 V2
need for Lead Plaintiff to continue litigating the case and engaging in formal discovery, which
would only delay any benefits achieved through litigation. The Settlement was nevertheless
entered into only after thorough investigation and analysis by Lead Plaintiff’s Counsel, and was
preliminarily approved through the Court’s September 4, 2018 Order.
C. The Recovery Obtained for the Class.
21. A substantial and certain recovery of $18.5 million in cash (an estimated recovery
of between 36% and 86% of maximum damages) has been obtained through the efforts of Class
Counsel at a relatively early stage of the litigation without the substantial expense, delay, and
uncertainty of continued litigation. Although the SEC and United States Attorneys’ Office later
brought their own cases against Defendants, this action was initially and overwhelmingly
pursued without the assistance of any regulatory or governmental agency.
22. The $18.5 million cash settlement is a highly favorable result for the Class that
was achieved as a direct result of the skill and tenacity of Class Counsel’s prosecution of this
Litigation on behalf of the Class. Class Counsel overcame difficult obstacles and took significant
risks in obtaining this favorable result for the Class. As a result of this settlement, Class
Members will now receive compensation for their losses for each share of Osiris common stock
they purchased or otherwise acquired during the Class Period, and will avoid the substantial
expense, delay, and uncertainty of continued litigation.
23. Despite the complexity of the issues raised, the skill and acumen of Class
Counsel secured an excellent result and significant benefits for the Class. Together with the
complexity of the case, the duration of the case – three years of investigation, litigation, and
extensive settlement negotiations – also strongly supports approval of the requested fee.
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 12 of 17
- 13 - 010568-11 1080089 V2
D. The Risks Undertaken by Class Counsel.
24. Class Counsel has spent three years investigating and litigating this case, all
while assuming a risk that the case would yield no recovery and leave them uncompensated.
During that time, Class Counsel still had to pay the salaries of the associates and staff working
on this case, and cover non-reimbursable overhead expenses like rent. Class counsel floated
these expenses while assuming the risk that there might never be any repayment. Hagens
Berman also advanced expenses, set forth below, interest-free, prosecuting this action,
including all expert fees and expenses, which are a substantial but necessary burden in any
securities action.
E. Providing Notice to Class Members
25. Class Counsel continues to lead and oversee the settlement and claims
administration process by working with Epiq Class Action & Claims Solutions, Inc. (“Settlement
Administrator”), a company selected to provide formal settlement administration services for the
Class. Class Counsel has spent and continues many lawyer hours and resources working with
the Settlement Administrator and assisting with the communication and guidance provided to
class members regarding the settlement, including working with the Settlement Administrator,
Defendants, and Lead Plaintiff’s own experts to establish a website that allows class members to
see expected payout amounts, specific to each class member. Class Counsel anticipates about
five hours weekly working with the Settlement Administrator and class members until settlement
distribution is completed, which is estimated to be in August 2019, assuming no appeals.
F. No Class Member Has Objected To Date
26. As of the date of this filing, and since the mailing and distribution of the Notice
of Pendency and Proposed Settlement of Class Action and the publishing of the Summary
Notice was approved by the Court in its September 4, 2018 Order, there have been no
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 13 of 17
- 14 - 010568-11 1080089 V2
objections received. As such, there is no opposition from any Class member, thus confirming
the Settlement's reasonableness and adequacy.
G. Class Counsel’s Work Is Not Done – Another Ten Months of Claims Administration
is Required.
27. During the period November 23, 2015 through October 31, 2018, Hagens Berman
performed more than 1,400.20 hours of relevant work in connection with this litigation,
corresponding to a lodestar amount of $1,008,218.50 based on the comparable rates to law firms
specializing in this area of practice as of October 31, 2018. Based on communications I have
had with the Claims Administrator, and additional counsel in the firm overseeing the claims
administration, more hours will be expended over the next ten 10 months, at a minimum.
We estimate attorney time will on average be 5 hours per month, plus additional time finalizing
distributions, and filing papers with the court for approval.
III. ATTORNEYS’ FEES AND EXPENSES
A. Class Counsel’s Hours Summary and Calculation of Lodestar and Expenses
28. During the period November 23, 2015 through October 31, 2018, my firm
performed 1,400.20 hours of relevant work in connection with this litigation, corresponding to a
lodestar amount of $1,008,218.50 as of October 31, 2018.
29. Attached hereto as Exhibit A is a schedule containing a summary indicating the
amount of time from November 23, 2015 through October 31, 2018, spent by the partners,
associates, attorneys and other professional support staff of my firm who were involved in this
litigation, the number of hours worked, their rates and their respective lodestar values, at both
current and historic rates. All attorneys, paralegals, and law clerks at my firm are instructed to
keep contemporaneous time records reflecting the time spent on this and other matters. The rates
at which the firm seeks compensation are its usual and customary hourly rates charged for its
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 14 of 17
- 15 - 010568-11 1080089 V2
attorneys’ and professionals’ services and do not include charges for expense items, which are
billed separately. The schedule was prepared from contemporaneous, daily time records
regularly prepared and maintained by my firm.
30. Hagens Berman’s lodestar is calculated based on the current comparable hourly
rates of the firm’s attorneys and paralegals practicing in the area of complex litigation,
specifically securities law class actions. These hourly rates are based on regular and ongoing
monitoring of prevailing market rates for attorneys of comparable skill, experience, and
qualifications in this field of practice. Hagens Berman uses different rates for different fields of
practice and typically does not bill clients on an hourly basis. The lodestar for Hirschler
Fleischer was calculated as described and set forth in the Declaration of Wayne G. Travell in
Support of Lead Plaintiff’s Motion for an Award of Attorneys’ Fees, Reimbursement of
Expenses, And an Incentive Award for Lead Plaintiff (“Travell Decl.”).
31. All of the services performed by my firm in connection with this litigation were
reasonably necessary in the prosecution of this case. There has been no unnecessary duplication
of services for which the firm now seeks compensation.
32. During the period November 23, 2015 through October 31, 2018, Hagens Berman
Sobol Shapiro LLP incurred unreimbursed expenses in connection with the prosecution of this
litigation in the sum of $21,397.91. These expenses were reasonably and necessarily incurred in
connection with this litigation and are detailed in the chart attached as Exhibit B.
33. The expenses incurred are reflected on the books and records of Hagens Berman
Sobol Shapiro LLP. These books and records are prepared from checks, expense vouchers, and
other source materials which are regularly kept and maintained by the firm and accurately
represent the expenses incurred, and none of them have been previously reimbursed.
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 15 of 17
- 16 - 010568-11 1080089 V2
These expenses reflect reasonable costs expended for purposes of prosecuting this action and
thus should be paid. Class Counsel maintained substantial incentives to control out-of-pocket
expenses in this case due to the high risk they would not be reimbursed and the near certainty
that many years would pass before Class.
34. A similar chart summarizing the expenses of Liaison Counsel are included in the
Travell Declaration (Exhibit 2). Class Counsel took a number of steps to limit the lodestar,
including directly performing of all critical litigation functions, including informal discovery,
motions practice, and working with the expert, eliminating the possibility of duplicative work by
co-counsel. In addition, Lead Counsel’s primary litigation team consisted of a small group of
attorneys, resulting in a significantly reduced lodestar and increased efficiency.
IV. OTHER MATTERS
35. Attached hereto as Exhibit C is a copy of Eisenberg, Theodore and Miller,
Geoffrey P. and Germano, Roy, Attorneys’ Fees in Class Actions: 2009-2013, 92 N.Y.U. LAW
REVIEW 937 (2017).
I declare under penalty of perjury that the foregoing is true and correct. Executed on this
19th day of November 2018.
By /s/Reed R. Kathrein
Reed R. Kathrein
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 16 of 17
- 1 - 010568-11 1080089 V2
CERTIFICATE OF SERVICE
I hereby certify that I am the ECF User whose ID and password are being used to
electronically file the foregoing with the Clerk of the Court using the CM/ECF system on
November 19, 2018, which will send notification of such filing to the e-mail addresses
registered, as denoted on the attached Electronic Mail Notice List, and I hereby certify that I
have mailed the foregoing document or paper via the United States Postal Service to the non-
CM/ECF participants indicated on the attached Manual Notice List.
/s/ Wayne G. Travell
Wayne G. Travell
Case 1:15-cv-03562-PX Document 103-2 Filed 11/19/18 Page 17 of 17